Seller beware

HOMEOWNERS looking to sell will soon be forced to compile a dossier on their property, revealing any hidden 'nasties' that might deter buyers - and pay around £600 for the privilege.

A Bill promoting the so-called 'sellers' pack' scheme goes before Parliament this winter and is expected to become law in England and Wales by 2006.

The Government, which has been pushing for the scheme for five years, says the packs will save time and money. It says 30% of transactions fail after an offer has been accepted, costing buyers £350m a year. The pack could also cut the time it takes to sell, so reduce 'gazumping' where a seller accepts a bid and then at the last minute accepts another higher offer.

But estate agents doubt the scheme will speed sales. Surveyors, who give broad support, fear sellers of cheap properties will suffer disproportionately because of the pack's fixed cost.

'The majority of our members are in favour of change to the process and believe there is potential here,' says Peter Bolton King, chief executive of the National Association of Estate Agents (NAEA). 'However, we have grave concerns about ways of implementing it.'

The Home Information Packs, or Hips, will include documents a seller normally produces later, such as title deeds and copies of warranties.

Sellers will also have to pay for a home condition report, which will include an energy efficiency assessment, and commission a local authority search, which looks for nearby problems such as incinerators and is normally undertaken by a solicitor. Currently these are commissioned by buyers after their offer has been accepted. Leaseholders, who include most flat-owners, will also have to include receipts for service charges and building insurance.

The packs have already been piloted in Bristol, where they were used in 60 sales. The Office of the Deputy Prime Minister says the results were positive. It found the typical time from offer to completion was just 48 days instead of the British average of 62.

Bristol-based estate agent Maria Coleman has run her own version of sellers' packs since 1996 and was involved with the pilot. 'There' s no doubt whatsoever that consumers love it,' she says. 'The thing that causes stress is when a week before you're due to move, a buyer decides they want to knock you down £3,000 because £300 of work is needed.'

Previously, 26% of her deals collapsed each year, mainly due to flaws highlighted in surveys. She says that has dropped to 3%. Coleman wraps up the cost of the pack in her fee - 1.75% instead of a more usual 1.5% in the city. But she says the Government's scheme, where sellers pay up-front, would also be effective.

Others are not convinced. A Parliamentary select committee, which examined the plans last month, echoed a concern from Bolton King's NAEA that the pilot was too small, and provided little evidence of a quicker process. It also says buyers will still need to undertake a valuation, another major point where deals fall down.

Bristol & West, one of two mortgage lenders involved in the trial, says buyers might not trust a seller's home condition report anyway, and commission their own - so defeating the object of the pack.

The Consumers' Association has welcomed the proposals, although it says action might be needed to help sellers in low-cost area: a £600 bill would be a large expense for someone selling a £10,000 home.

However, nearly all parties have advised against a minimum threshold where sellers don't need packs as this could stigmatise properties or areas and reduce their values further.

A further concern is that the Government will struggle to train the estimated 7,000 to 10,000 new home inspectors needed to undertake the home condition reports. The CA also fears insurers may refuse to give professional indemnity insurance to these inspectors until the scheme has successfully begun. Homeowners could therefore face a period of limbo where it is difficult to sue negligent inspectors. The CA wants the Government to create an ombudsman to rule on disputes.